Regional resilience during COVID-19: evidence from Colombian exporting clusters

ABSTRACT

This study characterises the geography of Colombian exporters and their response to the COVID-19 crisis. We define exporting clusters within departments using bipartite network analysis and community detection tools. The methodology empirically detects product communities – groups of products that are strongly related – which are compared with an alternative taxonomy of industrial clusters, and clusters exporting firms by considering their exports within these taxonomies. We define these groups of specialised firms localised in departments as exporting clusters. We then examine whether belonging to an exporting cluster can enhance firms’ trade margins. We find that clusters do not automatically improve firms’ trade margins and that there are differences in how firms react to a crisis within clusters. Our analysis contributes to regional studies by shedding light on the potential of exporters’ agglomerations to navigate and recover from crises and outlining critical firm characteristics that can strengthen regional resilience.

KEYWORDS:

• exporting clusters
• firm margins of trade
• resilience
• COVID-19
• bipartite networks
• community detection

JEL:

• F14
• L19
• R12

ACKNOWLEDGEMENTS

The authors thank Mercedes Delgado, Bernardo Diaz de Astarloa, Jenniffer Solorzano Mosquera and Matteo Grazzi for their helpful comments and suggestions. The information and opinions presented in this paper are entirely those of the authors and do not necessarily reflect the views of the Inter-American Development Bank (IDB), its board of executive directors or the countries they represent.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Notes

1. Departments are administrative units with heterogeneous characteristics in terms of population, employment and economic activities, which are usually geographically concentrated within departments in metropolitan areas. Thus, departments provide a reasonable unit of geographical analysis to study regional economies (for examples using similar units of analysis, see Arguello et al., 2020; and Delgado et al., 2014).

2. In response to the crisis, the Colombian government implemented policies to tackle its impacts on multiple fronts. The government primarily focused on mitigating measures, providing additional cash transfers to poor households, or expanding the social protection system to cover more households. Furthermore, the government prioritized maintaining liquidity and facilitating access to finance for firms through expedited tax devolution, new guarantees and credit lines. No targeted widespread policy for exporting firms was identified.

3. See http://www.clustermapping.us/

4. See https://unstats.un.org/unsd/classifications/Econ

5. Employment data are defined in the industrial classification ISIC Rev.4. To each product (HS six digits), we assign only one industrial sector (ISIC Rev.4, four digits).

6. We used web-scraping to obtain the age; see https://www.einforma.co/nit-empresas

Additional information

Funding

The authors acknowledge funding from the research project ‘The Role of Clusters for Economic Resilience: Evidence from Latin American Countries’, led and financed by the Competitiveness, Technology, and Innovation Division of the Inter-American Development Bank (IDB). Marco Dueñas acknowledges funding from the Italian Ministry of University and Research, PRO3 – Network analysis of economic and financial resilience (NetRes).